UK car manufacturers eye international opportunities though Brexit jitters remain

Rebecca Smith
Jaguar Land Rover To Cut 450 Jobs
Source: Getty

The UK car industry is "cautiously optimistic" about the future, though Britain's exit from the European Union is still seen as the biggest threat to the sector.

Lloyds Bank's third annual survey of the sector found that average investment over the next couple of years is due to stay steady at 19 per cent of turnover, as firms forecast a 15 per cent growth in turnover over the next two years. That's provided there are no political or economic shocks affecting demand or supply of course.

It's a similar story on job creation - aims there remain stable at around 85,000 new jobs over the next two years.

Read more: We're all going to carpool by 2027 and this is how it'll look

Three quarters of the 100 automotive firms surveyed intend to invest or plan to engage with new international customers in the same time period, with the number of businesses intending to engage new customers in Western Europe rising to 65 per cent from 61 per cent.

Almost a third of car firms said Brexit was the biggest threat to supply security over the next couple of years, while a similar number (29 per cent) said that leaving the EU was one of the biggest challenges facing the industry in the next two years.

Read more: After Brexit, banks will need more time to transition, BoE's Hogg says

The weak pound was also another issue flagged, as more than a quarter of manufacturers identified it as a potential issue. It wasn't all bad though; businesses saw opportunities from the EU exit too, including less bureaucracy, while more than a third expect to reap the benefits of a more competitive export environment.

The car industry remains the UK's largest manufacturing export sector with a national supply chain and a presence in every UK region.

David Atkinson, head of manufacturing at Lloyds Bank commercial banking and report co-author, said:

This report highlights an industry looking to the future, eager to put any uncertainty generated by the EU referendum behind it.

Encouragingly, job creation is forecast to hold firm over the next two years. However, much rests on the nature of the UK’s future trading relationships with some firms continuing to put plans on hold as they await the full details of Britain’s exit from the EU.

Related articles